Zamtel has been hindered by government involvement & a tendency to rob Peter to pay Paul & as such has suffered from a lack of serious investment. Now that competition for fixed line services is being realised with the emergence of fixed broadband competitors, the Zambian government has decided to try & back away & part privatise to allow a partner to come in & assist in re-building the company.
Zambian Communications and Transport Minister, Dora Siliya, said that the government is to appoint an asset evaluation company to conduct an immediate audit to determine the full extent of Zamtel’s assets and liabilities.
That exercise should be completed before the end of this month. Thereafter, via a tender process, a strategic equity partner will be sought and be in place by the Spring of 2009. However, even though it might be possible for a partner to make a decent return on investment in a relatively short time – if Zamtel is managed properly – for the Zambian government to be seeking a cash-rich benefactor as the global recession gathers momentum could be seen as being a big ask.
Last week, Zamtel’s acting CEO, Mukela Muyunda, let it be known that the Zambian government wants to separate Zamtel’s mobile arm, CellZ from the parent company.
Basically, CellZ has been run by Zamtel’s management for more than a decade past and has suffered as a result. The government has begun to press for the spin-off and to put in place new management structure for the mobile service provider that should make the mobilke operator more able to stand up to competitors Celtel Zambia / Zain & South African giant MTN
Zamtel is the dominant landline operator, but is the smallest of the country’s mobile networks by subscriber numbers. According to figures from Mobile World analysts, the firm ended the first half of 2008 with an estimated 403,000 subscribers, behind MTN with 453,000 – and a long way behind market leader, Zain who had 2.3 million customers. So any new partner will have an uphill struggle on their hands. Also, to complicate matters further, the National Union of Communication Workers said that it supported the sale in principle – but only if jobs are guaranteed. The company currently has a workforce of around 2,700.
Interesting times on the Zambezi … will return to this topic in due course, as I have a feeling that some Middle Eastern players may well come in with a package.